What’s the minimum age to be an authorized user?

You can boost a child's credit, but cards' policies vary widely

Some parents want to give their
child’s credit history an early jumpstart by adding them as an authorized user
to their credit cards before they reach adulthood. But before you try to add
your kid to your card, you need to consider card issuer rules.

At an appropriate age, adding your child as an authorized
user on your credit card can help your son or daughter build credit, provide
access to plastic in an emergency and offer lessons on using an account responsibly,
says Brette Sember, author of “The Complete Credit Repair Kit.”

“They're going to be using credit for the rest of their lives,
so it makes sense that you as a parent should teach them how to use it
carefully from an early age,” she says.

While some parents might be tempted to put their infant
on a credit card as an authorized user so junior can have 18 years of
credit history before he can get a card of his own, there’s no need to rush,
says Avraham Byers, a financial coach in New York and Toronto. Plus, not every
card issuer will allow that.

First, it’s not necessary because a few years is plenty of
time for a kid to a build a credit history and an excellent score, Byers says.
Also, adding a child too early can backfire, because if you ever run into financial
difficulties and you stop making payments on that card and your credit tanks as
a result, your kid’s credit will take a hit, too, unless you remove her from the
card quickly.

Instead, it’s best to wait until you’re in good financial
shape, your credit is excellent and your child is old enough to understand the
rules for using, and the consequences for misusing, your plastic.

Can you add a minor
to your card? UsuallyMost major card issuers allow you to add a minor as an
authorized user. Some of those impose a minimum age, others don’t. A few cards prohibit
cardholders from adding minors altogether.

The question of whether you can add your child to your card
as an authorized user hinges on age.

Half of the 10 major issuers surveyed by CreditCards.com allow minors as authorized
users with no minimum age. For example, Bank of America, Capital One, and Chase
all allow children to be added to a primary account holder’s card regardless of
age.

Of the rest, most allow minors but impose a minimum age in
the teens, usually between 13 and 16. For example, American Express and
Discover both require authorized users to be 15.

American Express decided on 15 because it seems to be an age
when a teen might need access to plastic and be old enough to start learning to
how to manage a card, says Marina Norville, vice president of corporate,
financial and risk public relations for American Express.

Other cards, however, don’t allow minors access to their
parents’ plastic at all. For example, Synchrony Financial rules vary by card
program, and some require authorized users to be at least 18, says Carlos
Campos, a spokesman for Synchrony.

Information demands varyCredit card issuers also vary in the type of information
they request when you go to add your child as an authorized user.

Some ask for only the name and address of the user you want
to add. Of the major issuers surveyed by CreditCards.com, only Chase falls into
that category. However, others don’t seem to verify age, says Linda Peck,
founder of CreditBoards.com. Some
parents on that forum have reported they were able to add young children as
authorized users to various major and store credit cards with no questions
asked.

Citi and Wells Fargo, however, request the name, address and
date of birth of the authorized user. And a number of issuers, including American
Express, Bank of America, Capital One, Discover and U.S. Bank, require you to
provide name, address, date of birth and a Social Security number.

American Express uses that information to verify age, as
well as to put fraud checks and controls in place, Norville says.

Some parents have been surprised to bump up against a
minimum age rule. For example, Randall Yates, CEO of The Lenders Network, says he tried to
add his 14-year-old son as an authorized user on both his American Express and
Discover cards, but quickly found out his son is one year too young to be added
to both cards.

“I’ll wait until his birthday and add him then,” Yates says.

Managing your child as
an authorized userBefore adding your child to your card, consider the ins and
outs of how the issuer handles authorized users to make sure you (and your child)
get the desired benefits without getting hit by high fees.

They’re able to get more credit, at a better rate, with
better terms earlier in life.

— Linda Peck Founder, CreditBoards.com

First, you’ll want to find out if adding your kid to your
card will cost you. Almost all cards from major issuers allow you to add an authorized
user for free, but a few premium cards charge a hefty fee. For example, American
Express Platinum cardholders must pay $175 a year for up to three
additional card guests, while Chase Sapphire Reserve cardholders shell out $75
a year for each additional card.

The fee depends on the card rather than the issuer. For
example, the American Express Gold card allows you to add five additional users
for free, and the Chase Slate card does not charge for extra cards.

Next, you’ll want to find out if and how your card issuer
reports authorized user information to the major credit bureaus.

Most major issuers report an authorized user account on the
guest’s credit files. However, some issuers report both positive and negative
information (such as late payments, etc.) associated with the main account on
the authorized user’s credit, while others, including American Express, report
only positive items.

It’s also important to consider how the issuer handles main
and secondary cards on accounts. Most issuers send an authorized user a card with
the same card number as the primary cardholder, which can make it challenging to
track a secondary user’s purchases.

American Express is the only major issuer that issues
authorized user cards with different card numbers and allows the primary
cardholder to set
spending limits for and receive alerts about the authorized user’s spending.
“Alerts and limits help to give the main cardholder a little more control,”
Norville says.

These limits aren’t foolproof, though. For example, if a
merchant doesn’t obtain an authorization for any reason, that purchase might
not get counted toward the limit, AmEx warns in the fine print.

In a pinch, Discover offers a Freeze
It option where you can temporarily freeze and unfreeze your account in
seconds using a smartphone app or online. This could be used to halt all
purchases if, for example, your child loses her card but you’re sure it’s buried
in a messy bedroom. However, the downside is it also freezes your own line of
credit at the same time, says Daraius Dubash, cofounder of rewards
travel site Million
Mile Secrets.

Business credit cards, including those issued by Bank of
America and Chase, offer another way to monitor and control authorized user
spending because they generally offer employee controls, Dubash says. For
example, Mark Grossman, a public relations professional in New York, added his 16-year-old
daughter as an authorized user on his consumer credit card, but disliked the
fact that all purchases were mingled.

So, he opened a business card, which separates purchases by
cardholder. “When the bill arrives, it’s clear what
she charged versus what I charged,” he says.

Removing your child from your cardEventually, the day will come
when it’s time to remove your child from your card.

You might decide to remove him
if he uses your card irresponsibly, but ideally it will be because he’s ready
to get a card of his own.

At age 18, a young adult can
legally enter into a contract and perhaps get
a card, though the Credit CARD Act of 2009 made
it harder for young adults under 21 to get credit cards, and they must show
proof of income or get a co-signer.

To remove
your child as an authorized user, you simply call
the customer service number on the back of your card. With some issuers, such
as Capital One, you can also remove a user through its online portal. When you
remove an authorized user, you are responsible for collecting the card and
other means of accessing your account, Chase states in its card member
agreement. And the issuer might close the account and issue you a card with a
new card number, according to Chase.

Don’t be too hasty to push
your kid out of the credit nest. Move slowly so you can remove
your child from your card without hurting her credit.
Your account typically will disappear from her credit reports once she is no
longer an authorized user.

If possible, wait until your son
or daughter has applied for, received and successfully used a new card for
several months or even years, Peck says.

As a parent, you can be
confident that adding your child as an authorized user has spared her from
having to start out with low credit limits and starter cards. In fact, Peck
says her niece, whom she added as an authorized user when the girl was in her
teens, was able to get a mortgage at a good interest rate in her early 20s.

“They’re able to get more credit, at a better rate, with
better terms earlier in life,” Peck says of young authorized users.

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